As reported by EndPoints:
President Donald Trump on Tuesday signed an executive order offering support for a change to the IRA’s “pill penalty,” one of the industry’s long-standing policy priorities that could affect billions of dollars in drug costs under Medicare.
The executive order on drug pricing contains a grab-bag of policy proposals, some of which are opposed by the industry. The proposed change, which would have to come from Congress, would no longer treat small-molecule drugs and complex biologic prices differently under the Medicare negotiation program.
Currently, Medicare price negotiations for small molecule drugs begin after nine years, while biologics start after 13 years, giving those drugs longer on the market before potentially having their prices pushed down. On a call with reporters Tuesday, White House officials said Trump would ask Congress to end that disparity, though didn’t prescribe a new number of years.
This is good news as paper by Clifford et al. (2024) found that small molecule drugs delivered comparable health benefits to biologic products at a lower cost. Specifically, the study found that:
…small-molecule drugs and biologics offer similar magnitudes of incremental QALY gains (0.08 versus 0.10). Small-molecule drugs tend to be associated with lower additional costs ($4,738 versus $16,020) and more favorable cost-effectiveness ($108,314 per QALY versus $228,286 per QALY).
We should focus on getting the most value for our money in health care, regardless if the value comes from a pill, biologic, surgery, or any other form of treatment.
